During the second quarter of 2020, the year-over-year growth of Spanish GDP decreased by 17.35 p.p., down to -21.51%. Regarding the labor market, the percentage of unemployed people in the labor force increased by 0.92 p.p. compared to the previous quarter, up to 15.33%. On the other hand, year-on-year employment growth stood at -6.05% this quarter, which was 7.13 p.p. lower than in 1Q20. In terms of prices, inflation stood at -0.63%, after a quarterly decline of 1.23 p.p. Regarding the exchange rate, the euro remained constant against the dollar in 2Q20, standing at an average rate of 1.10 $/€.

 


Macroeconomic outlook report: Spain 2Q20

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Macroeconomic overview

  • During 2Q20, the Spanish economy registered a y/y growth of -21.51%, after decelerating 17.35 p.p. compared to 1Q20.
  • The further deceleration of the Spanish economy was due to the significant reduction registered in demand due to the containment measures carried out during the second quarter to mitigate the spread of the Covid-19 virus. In the external sector there was a contraction in year-on-year growth of 2.45 p.p., down to a growth rate of -2.68%, due to a greater decline in exports (-32.47 p.p.) than in imports (-24.24 p.p.). Domestic demand fell by 14.90 p.p. compared to 1Q20, down to a year-on-year growth rate of -18.83%.
  • With respect to the labor market, the percentage of unemployed people in the labor force increased in the second quarter of the year to 15.33%, an increase of 0.92 p.p. over 1Q20. On the other hand, in 2Q20 the year-on-year growth in employment stood at -6.05%, which meant a worrying slowdown in the pace of job creation of 7.13 p.p. over the previous quarter.
  • The exchange rate of the euro against the dollar remained constant during 2Q20 compared to the previous quarter at an average rate of 1.10 $/€.
  • With regard to inflation, in 2Q20, CPI growth was negative at -0.63%, after a quarterly decline of 1.23 p.p.

For more information, click here to access the executive document in pdf (only avalaible in Spanish).